Mexico: patience truly a virtue for recyclers

Conditions in the domestic aluminium scrap market are mixed but constructive; flows into most yards have been stable to slightly lower, while higher prices have helped protect margins for recyclers able to manage their inventory with discipline.

The market has been selective, grade-driven and cautious. Clean extrusion scrap, especially 6063, has remained one of the more competitive grades, supported by export demand and the search for alternatives to expensive primary aluminium. UBCs and certain old scrap grades have also held firm - albeit at low percentages to the LME.

Consumers are not willing to build inventory. Most have continued buying hand-to-mouth, protecting cash and avoiding the risk of being caught with high-cost material if the market corrected. Inflation, financing costs and tariff uncertainty have put pressure on cash flow across the manufacturing chain. As a result, yards have been asked to carry more inventory burden.

One of the main operating realities of March and April was that patience mattered. In a stronger market, material moves quickly from generator to processor to consumer. During this period, the movement was less fluid. Consumers wanted supply availability, but not ownership too early. They needed security and price flexibility, leaving yards to hold inventory more frequently and for longer than preferred. For well-capitalised recyclers, this was not entirely negative. Rising scrap prices helped margins, and the ability to sort, upgrade and hold material became a competitive advantage.

The Mexican automotive backdrop has remained supportive, but not without warning signs. Vehicle sales continued to grow, and production and export figures were resilient. Still, tariffs remained a cloud over the North American industrial chain. Washington’s message has become clear: tariffs are no longer just a temporary negotiating tool but rather a structural element of trade policy. This reality affects automakers, parts producers, extruders, foundries and recyclers.

For aluminium, the risk is that high all-in costs begin to affect demand. The US market is already watching for substitution, delayed projects and reduced consumption in price-sensitive sectors. This matters because Mexico’s recycling industry is deeply connected to US demand through automotive, construction, heating/ventilation/air conditioning, industrial and exports.

Geopolitical risk has also reminded the market that primary aluminium supply is not guaranteed. Any disruption to primary flows strengthens the strategic role of scrap. Recycled aluminium is not only a lower-carbon input; it is also a supply-chain tool that reduces exposure to volatile primary markets.

Mexico’s opportunity is clear. We sit in one of the world’s most important manufacturing corridors, with proximity to the USA, experienced processors and a growing need for recycled content. The challenge is to convert that position into long-term value through better sorting, quality control, pricing and stronger consumer relationships.

The timing of the BIR World Recycling Convention & Exhibition in Gothenburg is excellent. We are facing high prices, tariff pressure, cautious consumers and shifting trade flows. These issues cannot be fully understood from behind a desk. BIR Conventions remain one of the best opportunities to compare sentiment, build trust and identify where demand, premiums and trade flows are moving.